We present a ‘new and improved’ version of Rabo’s Emerging Market Vulnerability Heatmap which is constructed from a more comprehensive list of inputs. The heatmap highlights ARS, TRY and ZAR as the most vulnerable emerging market currencies.

China’s economic lifeline is key for North Korea’s economy. Recent sanctions are expected to put more pressure on the regime in Pyongyang, but China also has its strategic interests related to North Korea.

A balance of payments crisis is unlikely in today’s Asia. Most countries have improved their current accounts and FX reserves. The rising debt load may however pose problems, although it nowadays is mainly local currency denominated.

Strong economic growth has diminished poverty in the region and will swell the ranks of the middle class. But corruption levels are high, China’s influence in the region is increasing and the dispute surrounding the South China Sea may generate stability risks.

Demographics will provide headwinds in the developed countries of APAC and China, and tailwinds in South Asia. While total factor productivity growth has fallen, the innovation outlook for the APAC region is still relatively favourable.

The South Korean government is trying to raise growth both in the short- and long-term. Meanwhile, the external vulnerability of the country and of its banking sector in particular, has decreased. Relations with North Korea remain uncertain and difficult.

Economic growth has accelerated last year, and is expected to rise to 3.4% this year. In the face of tapering, South Korea is confronted with an uncertain external environment. However, so far the impact has been limited.

Supported by government measures, real GDP growth in South Korea has been accelerating. Meanwhile, tensions with North Korea have eased, for now. South Korea’s banking sector remains vulnerable to external liquidity risks and rising household debt.

South Korea’s economic growth has slowed to around 2% in 2012. Presidential elections in 2012 passed smoothly, with Park Guen-hye winning the elections. The situation in North Korea has deteriorated as the regime has performed a third nuclear test.

South Korea's export oriented economy is weathering the global economic slowdown relatively well, although growth is slowing. Economic policy continues to focus on stability rather than supporting growth.

The death of North Korea’s leader, Kim Jong-il, has increased political uncertainty within North Korea and led to uncertainty for South Korea. Due to monetary tightening and lower external demand, real GDP growth was 3.3% in 2011.